US rally but signs of a long-term top
By Colin Twiggs
November 26th, 2012 2:00 a.m. ET (6:00 p.m. AET)
The S&P 500 broke resistance at 1400 and the descending trendline on the daily chart, indicating that the correction is ending. Expect retracement to test support. A higher trough would be a bullish sign.
The weekly chart still shows bearish divergence on 63-day Twiggs Momentum and reversal below zero would warn of a primary down-trend. Breach of resistance at 1425 would signal another advance but expect resistance at 1475.
The Nasdaq 100 is similarly headed for a test of 2800. Bearish divergence on 63-day Twiggs Momentum warns that a top is forming. Respect of 2800 would strengthen the signal, indicating reversal to a primary down-trend.
* Target calculation: 2400 - ( 2800 - 2400 ) = 2000
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